Renting For Members

What are Austria’s Social Democratic Party’s plans for freezing rents until 2025?

Amanda Previdelli
Amanda Previdelli - [email protected] • 28 Dec, 2022 Updated Wed 28 Dec 2022 14:09 CEST
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Rent prices are rising at the fastest rate in Austria for almost two decades. (Photo by Herve Papaux / Unsplash)

Austria's centre-left opposition party SPÖ is preparing to present a plan to prevent rent increases until 2025. Here's what we know so far.

Austria's Social Democratic Party (SPÖ) plans to introduce a motion for a rent freeze that would prevent rent increases until 2025, according to the Austrian Press Agency (APA).

Details on the plan should be debated in the party's next meeting on January 24th. However, the SPÖ has already advanced the main point of their proposal: "all rents should be frozen until 2025". The measure comes as high inflation and increasing energy prices put pressure on tenants in Austria. 

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According to data from Statistik Austria, inflation was at 10.6 percent in November. Additionally, rent prices in the country rose at the fastest rate since quarterly figures were introduced in 2004, as The Local reported. 

In the third quarter of 2022, the average price for rent (including operating costs) rose to €8.8 per square metre per month. This was 3.1 percent higher than in the second quarter and seven percent higher when compared with the same period in 2021.

Changes in index adjustment

The SPÖ also wants to change the index used to adjust rental prices in Austria. Currently, rental adjustments are based on the consumer price index, meaning they are tied to inflation. 

However, the centre-left plans to propose that prices be adjusted on the key interest rate of the European Central Bank instead - and that they be capped at a maximum of 2 percent. 

"Housing is a basic need and must not be left to the market and speculation", said the vice-chairman of the SPÖ, Jörg Leichtfried. He added that the population must have access to affordable housing, so there is a need for intervention in the sector.

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The Austrian Tenants' Association has already made an initiative to curb the massive rent increases. Its president, Georg Niedermühlbichler, had demanded from the government in autumn, given the ever-increasing inflation rate, both a rent cap and a renunciation of the contract indexation clauses. 

At the time, he mentioned that in Switzerland, rent increases are capped at 40 percent of the inflation rate, a measure that he defended should also be adopted in Austria. In addition, several European countries have introduced measures to hold rent, from bans on rent increases to a cap on how much of the inflation rate could be passed on to rental contracts.

How likely is a rental freeze to happen?

The SPÖ will submit a motion to Parliament, as any rental contract changes would also require legislative changes. 

The party is currently in opposition at the federal level in Austria and does not have a majority in the legislative house. 

However, rental matters are a widespread issue in Austria, especially as prices soar. Affordable housing is also a matter close to the junior coalition partners Greens, so it's not impossible for the SPÖ to get enough votes to bring about some type of change.

What is likely to happen is that a motion presented by the party - which is currently leading voting intention polls for the next elections in Austria - will put further pressure on the ruling ÖVP-Greens coalition. Possibly, then, pushing them to present their own set of reforms or aid measures for tenants. 

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Amanda Previdelli 2022/12/28 14:09

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